HBO, Discovery believe holographs are the future

More media companies are betting that virtual and augmented reality technologies aren't a passing fad, and that these mediums could be the future of entertainment.

On Tuesday, HBO and Discovery Communications announced that they have taken an equity stake in OTOY. The investment is intended to advance OTOY's holographic or augmented reality technology in hopes that the networks can present the content through their TV and digital channels.

"We are now entering an era where it's not just cord-cutting and it's not just video on demand," OTOY CEO Jules Urbach told CNBC. "The screen itself is going away."

Though details are scarce, one confirmed beneficiary of the OTOY and HBO deal will be Jon Stewart. In November, Stewart and HBO had signed a four-year production deal with OTOY. At the time, OTOY said Stewart was to co-develop new technology that would help him rapidly produce short-form content multiple times a day, with additional projects in the work.

Urbach said that HBO and Discovery's investment goes past Stewart's project. He pointed out that both media and technology companies are looking at immersive digital content as the next evolution of media.

In October 2014, Google invested $542 million in Magic Leap, a digital visual technology company that is working on creating an eyeglass that would allow people to see holographic images in real world settings. It's seen as a competitor to Microsoft's HoloLens, another augmented reality device.

During this year's Tribeca Film Festival, almost 30 exhibitors presented VR content in a variety of ways that could encourage mainstream adoption of the medium. A report from Greenlight VR and Road to VR estimated that 136 million VR headsets would be sold in the U.S. in 2025.

Urbach said OTOY's vision is to develop technology that would allow people to see these kind of experiences without needing additional VR headsets or even a desktop computer. For example, someone may someday be able to pull up a website like HBO Now or a sports game on their mobile phone and project a holograph of the content on their coffee table, he said.

"It is like 'Star Trek' or 'Star Wars' depending on if you want Princess Leia in front of you, or if you want to go in the holodeck and the experience be around you. … It's really not sci-fi anymore," Urbach said.

OTOY's roots in the tech and entertainment industry are deep. In addition to HBO and Discovery Communications, it also counts Autodesk and Yuri Milner's Digital Sky Technologies as major investors. Its board of advisors include former Google CEO Eric Schmidt, former IBM CEO Samuel Palmisano, Mozilla co-founder and former CEO Brendan Eich and, perhaps most important for making in-roads in the entertainment industry, William Morris Endeavor IMG co-founder and co-CEO Ari Emanuel.

The Los Angeles-based company's camera technology, which can create high-quality computer graphics in almost real time, has been used in films like "The Social Network," "Spider-Man 3" and "The Curious Case of Benjamin Button," and won a Scientific and Engineering Academy Award in 2010.